Reliance Industries is close to buying a stake in a shale gas field in Texas in the US, according to international media reports. Financial Times reported that an announcement to this effect is expected in New York late on Tuesday.
According to FT, RIL will pay $1.35 billion (Rs 6,200 crore) to acquire a stake in the Eagle Ford shale gas field in South Texas, controlled by Pioneer Natural Resources. Apparently based on information from reliable sources, the report said that RIL might acquire 45 per cent in the field. The company did not comment on the story.
RIL has shown growing interest in shale gas and recently acquired a 40 per cent stake in Atlas Energy's Marcellus shale acreage position in south-western Pennsylvania in April. The deal was valued at $1.7 billion.
“While the scale of investment in any tie-up with Pioneer is likely to be smaller than the Atlas deal, it nevertheless demonstrates RIL's appetite for diversification in geography, sectors, and relatively unproven technologies,” said Mr Philipp Lotter, Senior Vice-President, Moody's Investors Service.
Mr Alok B. Agarwal, Head Institutional Research, Mata Securities, called this a smart move on the part of RIL. “Being in the gas business, for Reliance it is only a logical extension. Even if it takes some time to get any return from the shale gas business, given their cash position it wouldn't be a problem for them,” he said.
RIL's interest in Pioneer's shale gas fields was talked about immediately after it acquired 40 per cent stake in Atlas's gas fields. Reliance claims to have access to 3.43 lakh acres of undeveloped land with an estimated 13 trillion cubic feet of gas.
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